Facebook Exchange Ads Could Raise Even More Privacy Concerns

By Mikal E. Belicove|For Entrepreneur.com|June 19, 2012

Facebook advertising’s latest makeover could raise new unease about privacy, tracking and snooping by the popular social networking site. Consider: Facebook already has more information on you than your own mother, and now it can serve up ads nearly custom-tailored to you on web pages when you’re off Facebook.

The social networking site last week began testing Facebook Exchange (FBX), which allows advertisers to buy Facebook ads that target its users off-Facebook browsing activity.

Previously, the ads displayed on Facebook would be based on users “Liked” pages, the interests they put in their profile, one’s location, and other info that users chose to share with Facebook, on Facebook. Now, advertisers can serve up Facebook ads to users based on the pages they visit other than Facebook.

Facebook Exchange will let advertisers deliver real-time ads to Facebook users who have received their cookies somewhere else on the Internet. This process delivers relevant ads to Facebook “customers” who have already expressed an interest in a particular service or product they were exploring on another site.

The example used by Facebook is a consumer searching online for a flight to Hawaii who doesn’t pull the trigger and actually book the flight. With Facebook Exchange, a travel website observing that consumer’s actions via cookies, can bid for the opportunity to retarget that user, showing them a related ad on Facebook. It’ll be right there, staring them in the face: “Dude, we can get you to Hilo and back for only $684!”